Paywall models: What you can learn from Bild, Handelsblatt, Wired and Co.

For decades, media companies and publishers relied on advertising as their main source of revenue. At the dawn of the internet age, most publishers initially assumed that they could use a similar advertising model to monetize their digital content.

However, this model was disrupted by two players: Google and Facebook. At almost 70%, these companies have such a large share of total digital advertising spend that, as a magazine or newspaper publisher, you need to think outside the box to generate greater revenue.

The good news is that some publishers have already successfully freed themselves from the threat of dependence on advertising revenue. It almost goes without saying that these companies are turning to digital paywall models in particular.

That's why in this article I want to highlight some of today's most promising paywall models. By analyzing these eight case studies, you may discover a promising digital subscription model for your own titles.

1 Boston Globes focus on digital subscriptions

Let's first take a look at the Boston Globe because it is the first local newspaper to have more digital subscribers than print. For example, in the first quarter of 2019, digital subscriptions increased from 108,000 to 112,000.

Yes, there are many other newspapers that have achieved great results by establishing different paywall models. However, these have always been national newspapers.

So how did the Boston Globe accomplish this feat ?

Simple. The Boston Globe has set digital subscriber growth as its top goal.

In doing so, local newspaper officials attribute much of their success to experiments with the metered paywall model. First and foremost, the Boston Globe eliminated a loophole that allowed users to bypass the paywall in incognito mode. But even as many Boston Globe readers voiced their displeasure with this initiative on Reddit, the company stood firm.

Second, the newspaper reduced the number of free articles from five to two within a 45-day window. And third, the newspaper expanded its mobile offering for digital subscribers. All in all, the Boston Globe was very pleased with the progress it made.

2 Wireds experiments

Wired has also achieved promising results with the use of a digital paywall model. For example, the American magazine saw a 300% increase in their digital subscribers after introducing the paywall.

How did Wired manage this?

By finding out what readers like through many small experiments. For example, when Wired began its paywall experiment, it focused primarily on three new types of content. These pieces were in-depth reports, idea essays and topic guides. It quickly became apparent that some of these texts were excellent for generating subscriptions. A popular example was the reportage titled Facebook's Hellish Two Years. But things like shopping guides were also among the most popular articles. So in Wired's case, the shift in strategy toward high-quality in-depth articles led to significant growth in digital subscriptions.

Another important factor in subscriber growth was various niche newsletters.

Want an example?

According to Wired's own data, a visitor who comes to the site through one of these niche newsletters is 19 times more likely to become a subscriber than a visitor who comes through a search engine. The newsletters even outshine the social media networks Facebook and Twitter. For example, visitors are 12 times and six times less likely to arrive via Facebook and Twitter, respectively.

The magazine has also invested a lot of time on optimizing its sign-up form. For example, it found that adding a payment option for Amazon Pay along with the prompt "place order" instead of "start my subscription" helped a lot.

There were, of course, some failed experiments. For example, Wired tried to lure subscribers by offering a so-called YubiKey. They even offered subscribers a cover for their laptop cameras as a gift. However, these experiments did not lead to sustainable growth. In summary, the magazine invested a lot of resources in experiments to optimize its own paywall. While some did not work, others helped increase digital subscriptions.

3 Dagbladet's personalized paywall model

Dagbladet is a large Norwegian newspaper that has significantly increased its digital revenue with personalized paywalls.

The newspaper now has more than 85,000 digital subscribers. Over a period of six months, the newspaper developed its own algorithm to show its visitors personalized content on its website.

To do this, the algorithm takes into account certain behaviors, such as whether readers read a particular article more than once and whether they look at similar articles. It also factors in dwell time to deliver content that is particularly relevant to users. Through this algorithm, Dagbladet manages to provide its readers with personalized content while increasing revenues.

Readers seem to like this kind of personalization. The newspaper claims that since the introduction of the personalized paywall model, subscriptions have increased by more than 100%. However, Dagbladet still derives most of its revenue from advertising (a huge 90%, in fact). However, the magazine and its parent company Aller Media want to make this ratio much more balanced in the future.

Of course, it is still unclear whether Dagbladet will be able to continue its impressive digital subscription growth. Nevertheless, it already shows the potential of personalized paywalls.

4 Handelsblatt's hard paywall model

The business newspaper Handelsblatt, is successful with an extremely hard paywall model. The paper only switched to a subscription strategy in the spring of 2018, focusing more on digital subscriptions. Today, the website contains only a few articles that can be accessed without a subscription. The rest are behind a paywall. In the app, there is even no free content available at all.

A/B tests again played a crucial role in the introduction of the paywall. The ultimate goal was not only to improve the customer experience, but also to improve the conversion rate. In parallel, the company launched mobile marketing efforts and created personalized buying processes using email sequences.

The hard work paid off. At the end of 2018, Handelsblatt was able to increase sales by more than 25% through its paywall. Via the app, a remarkable 58% of customers even became paying subscribers after a free trial period.

5 The Financial Times was ahead of the paywall trend

The Financial Times, one of the most respected newspapers in the world, was one of the first titles to opt for a paywall model. It all started back in 2002 with the introduction of online subscriptions.

Last year, the newspaper reached one million subscribers. Even more remarkable for the Financial Times, however, are two points. First, that 75% of its subscribers have taken out digital subscriptions, and second, that 70% live outside the UK.

So how did the Financial Times become so successful?

It owes much of its success to a heavily data-driven approach. As you can imagine, the FT has collected an immense amount of data about its readers over the years.

The newspaper uses this data to optimize both its reach and digital product strategies. Through a specific engagement score, its own editors can better understand which stories work best and why.

Ultimately, of course, the Financial Times simply delivers excellent business journalism, so many customers are willing to pay for this information.

6 Image and the power of videos

Bild , the tabloid newspaper of our client Axel Springer, is particularly notable for using videos to increase subscriptions.

While the company offers short, one-minute videos that are accessible to everyone, it places the detailed, longer videos behind the Bild Plus paywall.

Why does Bild do this?

Essentially because they found that eight of the ten articles with the highest conversion rates are either video documentaries or contain videos in some form. Bild Plus, of course, not only includes videos generated by the Bild team, but also other videos it has licensed from production companies.

Bild Plus' paywall model has been in place in this form since 2013. Since then, the digital paywall has generated around 400,000 subscribers who pay an average of €13 per month.

Examples of videos on the Bild Plus platform include a short documentary about former tennis player Boris Becker and the marriage between Instagram influencer Ina Aogo and soccer player Dennis Aogo.

As videos are becoming increasingly important in today's content world, video paywalls can be a great way for media companies like Bild to generate significant revenue.

7 The Athletic's ad-free, subscription-only model

The Athletic is a fast-growing sports news subscription service that uses an ad-free, subscription-only paywall model. As of October 2019, the young media company has gained over 600,000 subscribers.

In doing so, the news website is blazing an exciting trail. That's because it is the only ad-free, online-only pay platform for local sports news. From the beginning, the company had a paywall. The founders didn't want readers to be annoyed by pop-ups or autoplay videos. Rather, they wanted to create a comfortable environment by allowing users to catch up on their favorite team without distractions.

But just because the company has gained traction through subscriptions doesn't mean The Athletic hasn't experimented with advertising. Specifically, for example, it has launched a daily podcast called The Lead, which is published entirely outside the paywall. While the podcast is funded with advertising, the ultimate goal of the podcast, according to The Athletic, is to attract potential subscribers.

8 Esquire's vertical paywall model

Finally, I have a very interesting paywall model for you: Esquire's vertical subscription model. Specifically, it's a micro-subscription built around one of their most popular editors named Charles Pierce.

Pierce has been writing for Esquire since 1997. For some time now, interested readers have been able to pay $17.99 per year to read his content exclusively. Subscribers to this micro-subscription gain access to all of his writing, rather than being able to read only three free articles per month on the website.

According to the publisher, an average of 60,000 people per day read Pierce's stories. Since introducing the paywall model, Esquire has thus gained 10,000 new micro-subscribers within a year.

Conclusion

These eight examples are proof that a paywall business model can also work for your media company. If you are open to making some changes to your company culture and take the time to do some interesting experiments, you have an excellent chance of seeing sustainable growth with a paywall model.

The general trend in the media industry is also clearly moving towards a paywall-based subscription model. While the intricacies will of course vary from company to company, in most cases this model will provide you with a more stable revenue base compared to an advertising-first model.

And more importantly, paywalls allow you to build an even stronger relationship with your readers, which in turn builds customer loyalty.

To find out how we can help you monetize your own content, contact us here. Our options include paywalls, subscriptions, video pre-roll ads, and many more.

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